An equilibrium-based distribution market model hosting energy communities and grid-scale battery energy storage

Abstract

The deregulation of the electricity sector calls up for a more active participation of end-users and distributed energy resources. Distribution markets clear local marginal prices at distribution levels, guiding the consumption or flexible loads and providing bidding prices for distributed generators. This paper proposes a new distribution market model involving energy communities and grid-scale battery energy storage units. The new model is based on equilibrium rather than auction, optimization or leader-follower principles, thus resulting in a cooperative framework where all the agents partake as price-taker entities. Profit-oriented models of the distribution system operator, energy communities and battery systems are proposed, which are jointly solved through their equivalent first-order optimality conditions, thus recasting as an equilibrium problem. The final optimization model results in a tractable and easily implementable Mixed Integer Linear Programming. An illustrative 4-bus system serves to validate the new proposal, while further simulations in 33-, and 123-bus systems confirm that the new market model is implementable in large-scale distribution systems. The results obtained with the new proposal are compared with those from a conventional centralized model, demonstrating that the proposed distribution market inhibits distributed assets of high prices from wholesale market, thus enabling a better use of distributed resources and redounding in a more profitable result for communities and battery systems.